If it works, why not leave it?
Yes, it is useless under OS X, but is also doing no harm. I'm not sure what you'd use the space for. Without taking mine apart, I'm not sure if there's enough room for a hard drive in the bay. Even if there was, you'd need to use a SCSI drive as I'm pretty sure the main IDE bus only supports one hard drive.
If you ever get into playing with older Macs, however(particularly 68K Macs) it is very handy to have.
Apple has released most of their older OSs(I think most everything up to System 7.5) on their website, but most of the downloads are in the format of floppy disk images. You need a computer running a "classic" OS(OS 9 or earlier) and an internal floppy drive to make use of these.
When I'm making a set of system disks, I often dump a bunch of images onto a ZIP disk or CD, and use Disk Copy on my Beige G3 under OS 9 to make the floppies. In my experience, the G3 is the easiest, fastest, and overall the best computer for this job(especially since it's the last computer Apple made with an internal floppy).
If you're really determined to ditch it in your G3, stick it in a drawer. The drive is proprietary to Apple hardware, and-again-if you get into older PowerPC computers, you might find it handy.